Some commentators have expressed fears that this nation could end up “looking a gift horse in the mouth” by not approving either this or the AES Corporation project.
An anonymous commentary on the Nassau Institute’s website said of the LNG projects: “If ever the Bahamas had an opportunity to secure for its citizens an income stream that will be the envy of the region for very little effort, this is it. Did Saudi Arabia refuse to let their oil be drilled and processed and sold worldwide because it was too risky to the environment?
“Why would the Bahamas turn down such a golden opportunity, or put off the proposal at a time like this when the country so badly needs new industries to feed its families. If opportunity knocks, why miss the boat? Technology is changing the world so fast, that this opportunity may not continue to be available in 10 years time. Events can overtake it. So now the decision needs to be taken. The offer is on the table. If the offer is withdrawn, we may never see it again.”
Both the AES and Tractebel LNG projects, the construction of each likely to cost between $600-$650 million, have received federal US government approvals and the required permits, although the state of Florida has yet to grant its approval.
Leslie Miller, minister of trade and industry, recently said he had done everything in his power to ensure the LNG projects receive the Bahamian government’s approval, and this was expected to be forthcoming shortly.
The Government has to negotiate and sign a Heads of Agreement with both companies, in addition to approving their environmental management plans.
Apart from the several hundred construction jobs and about 40 permanent positions expected to be created by each LNG project, the Bahamas -through the Government – is also likely to benefit economically from licensing and royalty fees, plus a throughput fee.
The Nassau Institute commentary said that while $25 million licensing and royalty fees had been mentioned in the media, the Government had yet to publicly say what the value was. The $25 million figure would translate into $84 per Bahamian citizen, but if this was five times’ higher it would be $420 per person and at eight times $1,260 per person.
The commentary said: “And if these plants are eventually built to meet the anticipated needs of Florida in 15 years’ time, then nearly $4,000 per wage earner per year.
“In the event that the Government needs to replace certain customs duties to meet the proposed FTAA requirements, such additional items for the country would go some way to cover say, one fifth of the present customs duties.
The Nassau Institute website said that apart from the jobs created in the construction and operations phases, the Bahamas would also receive revenues from work permit fees from foreign staff and consultants. New business would also be created in Bimini and Freeport by LNG staff seeking activities to do on their days off.
The commentary said: “So the additional economic benefits for one plant will be considerable, for two plants significant and for three plants, truly amazing. Any economist should be able to assess the advantages to the Bahamas of such a new industry that has fallen into the laps of Bahamians just because of our geographical situation, at the edge of deep water.
“Both at Ocean Cay and Bimini, the same factors are in our favour. Small risks to large populations of dangerous effluent, and ease of access by large tankers.”
The commentary said all health and safety concerns had been addressed in the eight-volume report submitted by the Bahamas Science, Environment and Technology Commission (BEST) to Mr Miller.
It said that on the safety issue there had been “a complete misunderstanding” of the dangers posed by an LNG plant, which were far less than for oil or “any other industrial chemical plant”. LNG had a short fire ball and low fire rating, and was difficult to ignite, unlike petrol or diesel products. If LNG escaped, it evaporated into air.
The Nassau Institute website commentary added that the recent explosion in Africa happened at one of the world’s oldest LNG plants, which had suffered from a lack of maintenance and outdated parts.
By Neil Hartnell, The Tribune
